|
National Radio Project1714 Franklin Street #100-251 • Oakland, CA 94612 • 510-251-1332ALL RIGHTS RESERVED. For permission to reproduce and/or reprint, please contact us. |
MAKING CONTACT Transcript: #32-99 Corporate Pig-Out: Meat Industry Consolidation Phillip Babich: This week on Making Contact... Claire Hope Cummings: The agricultural system is completely out of whack. The farmers are not making money. The consumers are not getting necessarily a safer, healthy nutritious food supply. Rural communities are going out of business. David Bacon: The wage of the worker in a meat packing plant in say 1980 and 1981 was between nine and ten dollars an hour. And if you go to Nebraska or Kansas and Iowa now, and you walk into a packing plant, nine and ten dollars an hour represents the top of the scale. So this is after twenty years. Phillip Babich: As consolidation within the meat and agriculture industries takes hold, some of the largest corporations in the world are fattening their bottom lines. Meanwhile, workers and farmers are losing out. On this program, we take a look at this trend. I'm Phillip Babich, your host this week on Making Contact - an international radio program, seeking to create connections between people, vital ideas and important information. This summer, Cargill, the largest privately held corporation in the United States, announced its plans to purchase Continental Grain, the nation's number two grain exporter - second to Cargill. Both companies are behemoths. Last year Cargill chalked up over $51 billion dollars in sales. One of its units slaughters one-fifth of U.S. cattle. Continental, which generated $15 billion dollars in sales in 1998, not only pedals grains; it's in the pork business as well, owning a majority stake in Premium Standard Farms, the number three pork producer in the United States. Like other mega-mergers we've seen in recent years, the Cargill-Continental deal drew some government scrutiny. But, the Clinton administration's skepticism was easily chilled by Cargill's promise to sell-off some of its holdings as requested by the U.S. Justice Department. In July 1999, the Justice Department approved the deal, prompting U.S. Agriculture Secretary Dan Glickman to say that he was "very pleased that the Department of Justice has taken these steps to protect American farmers from the potential adverse effects of the merger." Glickman's assurances aren't likely to soothe farmers concerns, however. Claire Hope Cummings, a lawyer, journalist and food and farm editor at KPFA radio in Berkeley, who's been closely following the effects of consolidation on U.S. farmers, says as large corporations merge, small and medium size farms are closing down. Claire Hope Cummings: Consolidation is probably the most important issue in agriculture today. It's affecting everyone: the farmers, consumers, retailers, processors. We've been in a permanent farm crisis since the 1980s. Many people remember that and we lost a lot of farms then. But in 1996 for instance, farm income dropped eighteen percent, and it's been dropping since then. So farmers are not making money growing our food. So we're having a serious problem with farmers being able to make a living when they grow their food. Well why is that? Who is making a living? Agriculture is booming in this country. It's a huge industry. And somebody's making money. Who is it? It's large corporations. And the way that they make this money is by combining their interests. And having what they call "vertical integration" from the gene all the way to the plate and controlling each part of that food system in a way that benefits their processors, their packagers, their own companies. So consolidation is really these linkages which support a centralized control within a certain crop or commodity -- often it's in the meat industry or a particular grain. It's easiest to trace it there. But it's happening throughout the food system. Phillip Babich: As Cummings pointed out, the name-of-the-game in food industry board rooms is "vertical integration," a complete control of production from crops to consumers. Karen Hudson, a farmer based in Illinois and president of Families Against Rural Messes, or FARM, likes to put it this way though. Karen Hudson: The term that we like to use is "semen to cellophane". You say, "What does that mean?" Well, the producer owns the hog from the time it's conceived to the time it's in the package and in the grocery store. When the prices become so low that family framers are losing and going out of business, these large corporations can ride out that part of it and regain it during the packing phase. So they're able to take a loss during the growth of this animal, but they're going to regain it at the packing phase, whereas the farmer doesn't go that far. And we have lost so many family farms. In the state of Illinois where I live, as of March 1, 1999, we have the lowest inventory on record since December of 1937, as far as our hog inventory. Nationally, we have lost so many family farmers across the entire fifty states that it's a travesty what's happening. And right now, about four percent of all the large producers raise about fifty-nine percent of our hogs. Phillip Babich: Concerns about consolidation aren't just limited to small farmers. Rosemary Mucklow, president of the National Meat Association, which has offices in Washington, DC, and Oakland, California, says a few years ago members of her organization - which is decidedly pro-business - watched carefully as IBP, the world's largest beef packer, acquired another cow slaughtering plant in Texas. Since 1961 the South Dakota-based corporation, originally known as Iowa Beef Packers, has been buying up slaughter houses and beef processors, reshaping the meat industry. The Texas deal went through, but after a short while IBP's new acquisition failed. Still, says the NMA's Mucklow, small and moderate sized meat packers are wary of consolidation. Rosemary Mucklow: We're very concerned, because we think that smaller companies, the medium sized firms and here in California you have some very efficient smaller beef packers -- the best known is probably Harris Ranch down in Coalinga, where they feed their own livestock that they have carefully selected through to the slaughter weight and then slaughter it and sell it all under their own brand name. Moderate sized firms -- these are not small firms, they're moderate sized firms -- are very efficient and innovative in terms of bringing new products to the marketplace. And if there is one thing that our industry has fallen behind on, it is bringing to the consumer a more convenient type product, to prepare quickly and to serve in their homes. Phillip Babich: As meat packing companies grow, so have the farms that supply them with livestock. Some of these operations can house tens of thousands of animals. In the hog industry these factory farms are known as CAFOs, Concentrated Animal Feeding Operations. Michele Simon, an attorney and journalist who specializes in food issues, says that large corporations are setting up CAFOs in rural communities. Michele Simon: The mainstay of the facility is what industry likes to refer to as a lagoon. And it's sort of an interesting term, because it congers up these lovely images of a vacation spot, when in reality they are enormous cesspools. And it's the way the industry has determined is the best way to deal with the huge amounts of animal waste that's generated from these thousands and thousands of hogs that are confined in these operations. So these lagoons are made of clay lining, and they're supposed to contain the waste in a body of water. Unfortunately, they don't do that, and more and more studies are coming out showing that they are in fact leaking these dangerous toxins. And the result is getting into the area drinking water. And, more importantly, the toxins are actually ambient in the surrounding air and residents are becoming affected by that. For example, there was a study recently out of North Carolina which showed that area residents who live near these operations are more likely to suffer from respiratory illnesses than residents who aren't living next to these facilities. So for the first time we have, you know, a bonafide study that proves what these residents have been complaining about for some time. Phillip Babich: Studies also show that hundreds of compounds -- some toxic to humans - can migrate from these lagoons. Hudson, of Families Against Rural Messes, says that in some cases factory farms fertilize nearby fields by spraying particalized hog waste. Karen Hudson: The odors that are emitted are hydrogen-sulfide, methane, ammonia, many other odors. There's approximately two hundred compounds that come off of a hog lagoon, or the vast hole that stores the waste. They actually pivot irrigate, or spray this waste into the air onto the fields. This will drift five to seven miles on a breeze and impact anyone within breathing distance if the wind is correct. There have been families in many states that have actually had to leave their homes for the night and stay in a hotel. There's one particular family in Minnesota that actually leaves their home and stays in a hotel when the odor is that bad. One of the most dangerous parts of this smell problem is hydrogen sulfide. It's a potent neuro-toxin, which has been proven to cause permanent and irreversible nerve system damage even at low ambient levels. Phillip Babich: Hudson adds that CAFOs have caused an uproar in rural communities in hog-raising states. Karen Hudson: I have to say that folks in North Carolina are more worried about hog farmers than they are about taxes or crime. They did a recent study within the last two years assessing positive and negative trends in eastern North Carolina. And 89.9 percent of folks thought that ground water near large-scale livestock operations should be monitored. About 84.9 percent wanted odors controlled. And 71.7 percent wanted their homes to be set back farther from CAFOs than they already were. In fact, water quality in hog farms were ranked as bigger threats to their quality of life than escalating taxes or crime rates. When you look at the way that folks are impacted, a rural sociologist by the name of John Eiker out of Missouri effectively explains that the corporation does not have a choice. These corporations come in... They can only be a corporation. They can't care about their neighbors. They can't care about the families or other things. The only mentality that these corporations have are profit and growth. So here we are the average housewife, the average community, the average family fighting these large corporations. Stephanie Welch: You're listening to Making Contact, a production of the National Radio Project. This radio program can be heard across North America, in South Africa, and on the internet. You can also hear us on Radio for Peace International short wave. If you want more information about the subject of this week's show, call the National Radio Project. It's toll free: 800-529-5736. Call that same phone number for tape and transcripts: 800-529-5736. We also welcome comments and suggestions for future programs. Phillip Babich: Advances in production, preservation techniques and distribution systems helped propel consolidation within the meat industry beginning after World War II. Labor journalist David Bacon says that this led to the growth of grain companies, which fed the animals. David Bacon: Instead of having, you know, small family farms raising just a few animals at a time, you have the growth of large scale farmers who would raise, you know, hundreds in some cases thousands of animals. And feed lots growing to become really enormous in size. And consequently also the growth and the consolidation in the industry that fed the animals, namely the grain industry. So that you have Cargill and ConAgra and Continental grain companies becoming really huge corporations. And these companies also became owners of operations which process, the food all the way down the line. You have, the appearance of TV dinners and the appearance of, you know, very processed foods which really didn't exist at the end of World War II. Now you go into a supermarket and the majority of the food that you see on the shelf is much more processed than it was at that point and those, you know, companies became owners of the food processing plants as well. Rosemary Mucklow: Forty years ago people trekked their livestock into central markets. Phillip Babich: Rosemary Mucklow of the National Meat Association... Rosemary Mucklow: The most famous in the meat business were known as Chicago, and Omaha, Fort Worth. Today, major slaughter plants are located out near the source of those live animals, in the very large mid-western states, in Nebraska, Kansas, Colorado and Iowa, and also in the big diary states: Wisconsin, California still has several packers that slaughter dairy livestock. Phillip Babich: Perhaps one of the biggest changes in the industry occurred in the 1960s when IBP introduced "boxed beef." This presented a fundamental shift in the way meat was packed and processed...and allowed IBP to grow from a one-farm company to the world's largest beef packer. David Bacon says that prior to "boxed beef" packers would ship quartered or halved carcasses to markets where skilled butchers would cut the meat for their customers. David Bacon: They invented the process in which the beef was cut into... It was totally boned, the bones were taken out... or, if not totally boned, mostly boned, and cut into the actual consumer cuts in the packing houses. Then they would be put into boxes, and the boxes would be shipped off to retailers. And that was accompanied by an enormous turmoil, as you can imagine, in the stores because a lot of people lost their jobs. And the process of selling meat became de-skilled essentially, where people who once, you know, were experts at cutting and boning meat became essentially just packagers. And so IBP became a big player and the other companies who before then had dominated the meat industry - Armor and Swift and Cudahy - actually become much smaller players as IBP grew. And IBP essentially set the tone of the industry both in terms of how meat was cut up and marketed. And then also eventually what the labor relations in the meat packing industry were like which was a profound change for people who work in that industry. Phillip Babich: This "profound shift," adds David Bacon, eroded the strength of two major labor deals in the beef and pork industries. These were known as the Master Meat Packing Agreements, which essentially set wage rates for workers. David Bacon: You had the destruction of the wages and the wage structure in the industry that workers had been able to achieve through primarily the organization of the United Packing House Workers during the 1930s and the 1940s, which was a very militant industrial CIO union which organized the packers at the time - the Armors, the Swifts, the Cudahys - ...organized those companies and established what were Master Meat Packing Agreements in the two meat industries: beef and pork. There was a Master Beef Agreement and there was a Master Pork Agreement. Then with the advent of these technological changes in the industry and the growth of companies like IBP, those Master Agreements were destroyed essentially, at the beginning of the 1980s. And as a result of it, the wage of a worker in a meat packing plant in say 1980 and 1981 was between nine and ten dollars an hour. And if you go to Nebraska or Kansas and Iowa now, and you walk into a packing plant, nine and ten dollars an hour represents the top of the scale. And you have workers who would start out work at six dollars and seven dollars an hour and go up to eight or eight fifty. So this is after twenty years. Phillip Babich: Concerns have also been raised about food safety and the treatment of livestock. Claire Cummings says animals at factory farms are routinely dosed with hormones, drugs and antibiotics to promote rapid growth and stave off diseases that can result from close confinement. Claire Cummings: The animals are treated abysmally. I think there's been a ground swell of activity by like the Humane Farming Association and the Humane Society of the United States, who are talking about, not only the suffering of the animals, who are confined to large feed lots and who are treated badly and pumped full of drugs, but also the slaughtering practices which contaminates the meat. And then you get into the packing houses. Now they're hiring people that are not trained and they're speeding up the lines in those slaughter houses so that they end up having no time to inspect. And of course with deregulation in all areas of government, a lot of industries and including the meat industry only has voluntary compliance in some cases, or very few inspectors. And there's no way they can catch the kind of contamination that happens in the meat supply. So unfortunately, instead of providing us with more guarantees of our safety, healthier food and healthier animals, we're ending up with serious food safety problems as a direct result of consolidation. Phillip Babich: But, Rosemary Mucklow of the National Meat Association says that consolidation has not led to the lowering of food safety. She says that the USDA's Food Safety Inspection Service is stringent, and most packinghouses have inspectors and veterinarians on site. Rosemary Mucklow: They provide for what is known as "continuous inspection". That means that those plants do not operate unless there is an inspector on the premises. Or, in the case of steak cutting and sausage processing operations, the inspector knows their hours of duty and may come by at any time. If they operate outside of their published hours, they would be subject to severe penalties with criminal implications under the law. So it's not worth companies doing that. We are in the process of moving into what is known in the food industry as HACCP: hazard analysis critical control points. And the HACCP system is one that is designed to be preventive. It is to prevent problems arising. Each plant develops a hazard analysis of the hazards that may occur and then establishes critical control points to measure them. The United States Department of Agriculture introduced a major new regulatory initiative using the HACCP based system for its regulatory controls. It announced it three years ago. It implemented in those very large plants in January 1998, in medium sized plants in January 1999. And it will implement in the remaining plants next January 2000. Phillip Babich: Nonetheless, many questions continue to be raised about the U.S. meat supply. In July, striking workers at an IBP beef plant in Pasco, Washington, alleged that their working conditions are unsanitary and that there are food safety problems. There have also been fears that Mad Cow disease, which has already occurred in Great Britain, could strike the United States. And, some high-profile studies have shown that humans are becoming resistant to critical antibiotics, in part due to consumption of these antibiotics through eating meat. One government and industry-backed solution to food contamination has been irradiation. Journalist and attorney Michele Simon says that this makes a bad situation worse. Michele Simon: What's interesting is to think about what our government has proposed as a solution to this growing food safety problem. Instead of going to the source, which is these messy slaughterhouses, they're looking at high tech solutions such as irradiation. And USDA and FDA are both touting irradiation as the big solution to our food safety problems. And of course that raises a whole other host of potential environmental disasters, namely nuclear waste and what to do with that. And then we don't have all the data in yet about the safety of irradiated foods. And so, in other words, what we should be doing is taking a look at the source of the problem instead of doing something that will add more problems. Phillip Babich: Consolidation has brought a mixed response from beef and pork unions. Although union representation in the meat packing industry has seriously declined, organized labor still represents about 60% of the workforce, according to labor journalist David Bacon. But, union clout is not what it used to be -- in part due to centralized control over production. Another component has to do with the emphasis union leaders have placed on simply maintaining contracts with large companies such as IBP. Bacon says that since the 1980s there has been somewhat of a dividing line between rank-and-file workers and union leaders. David Bacon: There were some pivotal strikes that took place in the meat packing industry in the early 1980s. There was the Penine strike at the Hormel plant in Austin, Minnesota. There were strikes at IBP plants, and part of IBP is union actually, none of their plants are union plants. There was a big strike at the Hormel pork processing plant, the largest hog plant in the world in Sioux City, Iowa, during the late part of the 1980s and the early part of the 1990s. And in many cases, the workers involved in those strikes felt that the international union did not back them up in their effort to try and keep conditions and wages from deteriorating; that the union was more committed to maintaining contracts, regardless of what the wage level was, then actually maintaining the wages and conditions in the plant. And that became the big, and still is a big, dividing line in the union in the meat packing industry. Phillip Babich: Organized labor should be in a comfortable bargaining position with the meat packing industry operating at an estimated 80 percent labor capacity. But, meat packing businesses are trying to fill that 20 percent job void by hiring undocumented immigrants, keeping a downward pressure on wages. The workforce in the meat packing industry, says David Bacon, may start resembling that of the agriculture sector, which, in California, consists of about 90% immigrants. David Bacon: In the meat packing industry, which originally relied on the domestic work force, or the native work force in the towns and cities in the Midwest, now relies increasingly on an immigrant workforce in the same sense that agriculture does. They send recruiting teams out, for instance, to Los Angeles, they send recruiters down to the border to sign up workers for jobs in, tiny towns in the middle of Kansas and Iowa. And even doing that, they can't completely staff their plants. And so now there's even discussion in the meat packing industry of contract labor programs, guest worker programs, in trying to change immigration laws in a way that would give them the ability to import contract laborers in the same way the bracero program operated back in the 1940s and 1950s. Phillip Babich: Investors and large multinational corporations have been smitten with merger-mania in the meat and grain industries. Annual profits for top companies like IBP, Cargill, ConAgra and Archer Daniels Midland are in the hundreds of millions of dollars. As for small and moderate sized packers...Rosemary Mucklow of the National Meat Association suggests they should run for cover. Rosemary Mucklow: There are many concerns, and one of the biggest concerns are by producers who have a few animals and they, in many respects, would like to go back to the good old days when they had a slaughterhouse nearby and could take an animal. But we're not going to be going back. There is just no return journey to the way things used to be. The small producer needs to ally himself with the next person in the marketing chain, which is usually a large feed lot -- either a production arrangement for hogs or for cattle, where they can be congregated in numbers like twenty-five thousand or fifty thousand, and fed some very specific rations, very nutritious foods in order to get them ready at an optimum slaughter weight to go to slaughter and make us the steaks that we love to eat. Phillip Babich: But there may be more at stake than jobs, companies, and cuts of meat. Karen Hudson: We're preservationists. We're trying to preserve our communities. We're not tree huggers. We just want our communities to remain viable, our rural communities to be there in another fifty to a hundred years. And the way things are going in agriculture it's going to be very difficult for that to happen. Phillip Babich: Karen Hudson of Families Against Rural Messes... Karen Hudson: We would like to see a moratorium on all new factory farms or CAFOs until we have some clean water protections. We would like to see a phasing out of these giant, open-air lagoons, which we call cesspools. And we'd like to require that the development of better technology be utilized to treat the inerts. And we'd like to see frequent inspections of CAFOs that conduct regular air and water quality monitoring. Probably last, but most importantly, we'd like to educate consumers to avoid factory produced meat if at all possible, and to select meat products produced by diversified family farmers. Phillip Babich: As a side note: A number of rural communities have asked Congress to request that the U.S. Department of Justice investigate anti-trust implications as a result of recent buy-outs and mergers in the meat and grain industries. There's been no response as of yet. That's it for this edition of Making Contact...a look at consolidation in the meat industry. Thanks for listening. We had production assistance from Eric Hamako. Laura Livoti is our managing director. Peggy Law is executive director. Our production assistant is Shereen Meraji. Norman Solomon is senior advisor. Our national producer is David Barsamian. And I'm your host and managing producer Phillip Babich. If you want more information about the subject of this week's program, call the National Radio Project, at 800-529-5736. Call that same phone number for tapes and transcripts. That's 800-529-5736. Making Contact is an independent production. We're committed to providing a forum for voices and opinions not often heard in the mass media. If you have suggestions for future programs, we'd like to hear from you. Out theme music is by the Charlie Hunter Trio. Bye for now. |